Metropolitan Transit System

The company is lately facing some problems that need us to take some actions, if we want to keep our customers happy and our business running. I will address some of the major issues that came up and make some suggestions in the following pages.

* Roadcall performance report: reported miles between roadcalls 4773, way below the industry average - which is 5300 - 5500 and the board wants to be the same or above the industry average. These are caused also by the fact that this winter the snowstorms that came early, impacted the busses and as Dan Blocher observed from the data in Exhibit 1 the number of transmissions for the month of November was out of line with the previous experience. We can see Exhibit 1 in the Appendix area, that 46 busses need to have their transmission changed, which is a major inconvenience and as well major repair for the company, because if a bus brakes down and the transmission is not functioning any more, not only it takes usually a couple of days to actually fix the bus but the process for a roadcall is way more complicated and it also takes more time until another bus comes along and takes the passengers to their destination and the broken bus is hauled back to the garage. Besides all these, we will not take into consideration the bad image that this gives out towards our customers and the fact that some of them might be late for important appointments or for other urgent issues. So all this would relate into our dependability image that would be highly affected and thus the image of the entire system, especially with the latest spending for our advertisements and promotions campaign that took place within the last three years in order to increase customer interest in transit service.

* Besides the transmission problems we can see that the engine problems are increased as well and those usually take more time than the transmission itself. 67 engine problems just in the month of November plus the 46 transmission problems would come up to 113 busses, more than 10% of the bus fleet was under major repair in the month of November. All these, added to the electrical problems that are in the number of 98, make us come the following conclusion: the fleet of busses in very old and full of problems and that is why the plan to purchase new busses in the next 3 years is a very viable one and it will be addressed in more details later in the report.

* If you look at Exhibit 2, you can notice the usage of the busses that are in the entire fleet. The color blue demotes the busses that are approaching 10 years in age and have been used way over the average lifetime. Also the color red denotes the busses that we can consider to be more modern and young and as we can see those are the ones that are being used more and the cycle of their usage is way over the average lifetime. If we consider that there newer busses are more reliable and we can make more trips with then without having so many problems then it means that the investment in acquiring the new busses over the next 3 years from the same manufacturer would be a very good idea.

* The fact that all the supply materials for all the busses are provided from all over the world is a very inconvenient fact. As you can see in the case of those materials that the company is waiting for since last year, the fact that out one year supplier for that particular type of busses is located in another part of the world can impede us from having those busses on the streets. So a 3 year contract would make more sense because this way our supplier would provide us with the appropriate spare parts and our fleet would not be so random and delivery time after that 3 year period would most likely decrease. Best case scenario the same company would big for another 3 years and we would have 6 consecutive years of busses provided by the same constructor, which would decrease our spare parts inventory because we would require less spare to put all the parts because of the